Supply squeeze

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Under a cloudy sky in early April, five workers feed discarded Cookie Monster nappies into a machine to shred and recycle them.

"This is the warm 'popcorn' for low-density polyethylene, or LDPE, as a base material for industrial packaging, tarpaulin and drip tape," said G. Aushal, managing director of Sannanda Rika.

His company sources discarded plastic waste from the European Union and Japan to recycle it into up to 500 metric tons of LDPE materials every month. On the floor of the recycling plant, located 50 kilometers west of Kuala Lumpur, are hundreds of pallets of 25 kg packs of LDPE that are wrapped and stacked.

The Iran war has affected not only the flow of oil but also plastic supply. Aushal's recycled plastic firm, along with others in the industry, has seen increased demand.

He said: "A Singapore-based customer could not secure plastic supply, so he asked me to ship up to three 40-foot containers of recycled plastic resin per week instead of per month previously." One container typically carries 27 to 28 tons.

Will Low, vice-president of the Malaysia Plastic Recyclers Association, said the demand for recycled materials has risen an estimated 20 to 30 percent since the US and Israel launched airstrikes against Iran in end-February. "At the same time, prices of some virgin materials have increased more than 50 to 60 percent. That is why some manufacturers have brought forward plans to increase the percentage of recycled materials in their product," he said.

In a blog post on April 12, Malaysia's Deputy Finance Minister Liew Chin Tong said now is the best time to scale up the plastic recycling industry amid a shortage of imported plastic resin in Malaysia.

Given the shortage, Low said recycled plastic is a strategic alternative.

"Typically, the price of recycled resin final product is 10 to 20 percent lower than virgin resin, which is produced directly from crude oil. We are pushing hard for the government to implement Extended Producer Responsibility (EPR) to drive the demand for recycled resin," he said.

EPR makes producers responsible for products across their life cycle to reduce plastic waste. The Malaysia Plastics Sustainability Roadmap aims to increase recycled content in packaging from 10 percent in 2023 to 15 percent in 2030 to stimulate investments in the "collection, sorting and recycling industries".